Global financial markets are focused on the US Consumer Price Index (CPI) data to be released today, with August inflation figures being one of the most critical macroeconomic indicators of the week for Bitcoin and overall risk appetite.
For Bitcoin, the critical point is not just whether the data comes in above or below expectations, but how it will change expectations regarding the Fed’s future interest rate policy.
If inflation, particularly core CPI, falls below expectations, markets may price in a more cautious approach by the Fed regarding interest rate hikes. In such a scenario, downward pressure on US bond yields and the dollar could support demand for risky assets, especially Bitcoin.
Conversely, stronger-than-expected inflation data could increase pressure on the Fed to maintain tighter monetary policy and strengthen the likelihood of an interest rate hike at the September 15-16 meeting. In this case, the rise in the dollar and US bond yields could create short-term selling pressure on Bitcoin.
At this point, the probability of a September rate hike is priced at 67.1%, while the US August inflation data, which the Fed closely monitors when making its interest rate decisions, has been released.
Here are the US inflation figures that have been released:
Consumer Price Index Annual: Announced 3.4% – Expected 3.4% – Previous 3.4%
Consumer Price Index Monthly: Announced 0.4% – Expectation 0.4% – Previous 0.1%
Core Consumer Price Index Annual: Announced 2.4% – Expected 2.4% – Previous 2.5%
Core Consumer Price Index Monthly: Announced 0.3% – Expectation 0.2% – Previous 0.2%
The consumer price index is a key variable used to measure consumer purchasing trends and changes in US inflation.
Bitcoin’s Initial Reaction After the CPI Data!
*This is not investment advice.
